Safehold Inc. 8-K

What Happened
Safehold Inc. (formerly iStar Inc. after the merger described in the filing) announced an estimated unrealized capital appreciation (UCA) of $9,272 million in its owned residual ground-lease portfolio as of December 31, 2025. The company reports a Combined Property Value for the portfolio of $15,947 million versus a Ground Lease cost basis of $6,675 million. Independent valuation firm CBRE, Inc. prepared the property valuations (using MAI-designated appraisers and USPAP standards) on a fee-simple hypothetical basis that assumes no ground leases in place.

Key Details

• Estimated UCA (owned residual portfolio, 12/31/2025): $9,272 million (Combined Property Value $15,947M less Ground Lease Cost $6,675M).
• Valuation provider and methodology: CBRE appraisals (sales-comparison and income-capitalization approaches), producing hypothetical fee-simple values that ignore existing ground-lease contracts.
• Valuation cadence: properties valued approximately every 12 months (no less frequently than every 24 months); initial CBRE report generally in the quarter after acquisition or after construction/renovation completion.
• Limitations noted: UCA is non‑GAAP, not audited, based partly on tenant-supplied NOI and estimates, subject to tenant rights (e.g., buyouts, demolition rights, purchase rights), and some property valuations may use internal management estimates until CBRE reports are completed.

Why It Matters
The UCA figure is intended to show the potential long-term value accreting to Safehold from its residual interests in ground-leased commercial properties (i.e., the value of land + improvements if the company regains full ownership). For investors, the $9.27B UCA highlights the scale of Safehold’s reversionary real‑estate exposure versus its cost basis, but the company warns this measure is not GAAP, may not be realized near term (leases remain in place for decades), and could change materially with market conditions, tenant contracts, or updated appraisals. The filing underscores the valuation process and important limitations investors should consider when interpreting the headline UCA number.